Four years and three prime ministers after Greece’s then premier, George Papandreou, requested an international bailout that slammed his nation with painful austerity (but saved the EU banks), Bloomberg notes that political instability still haunts Greece. Despite issuing bonds and GDP coming in slightly better than expected (still in recession/depression), former Prime Minister Costas Simitis of Pasok admits “The euro crisis seems to be over but its causes have not withered away,” and if election polls are anything to go by, the fragile fraud that is a Greek recovery is set for problems Samaras’ governing coalition as Syriza (the opposition that rejected the bailout terms) support soars and Pasok plunged to sixth place with just 5.5% support. In addition, retroactive taxes on bond gains are weighing on European bond markets (and Greek stocks).

The provisions of the Circular refer to both non-resident individual and non-resident legal entities without a Greek permanent residence/establishment that have realised capital gains from Greek debt (including government and corporate debt which is either listed or unlisted) in the period between 29 February 2012 and 31 December 2013.

The tax imposed on such capital gains is 33% for legal entities and 20% for individuals

In other words – if you damn speculators made money on the back of the ECB’s promise, fuck you pay me!

While New Democracy trails Syriza, the opposition group that rejected the terms of the bailout packages, the bigger threat to the government may be the collapse in support for Samaras’s coalition partner Pasok. Papandreou’s Pasok, which dominated Greek politics for three decades, plunged to sixth place with just 5.5 percent of the vote in a recent poll as voters blame the party for the country’s economic meltdown.

Samaras’s governing coalition has 152 lawmakers in the country’s 300-seat legislature. The prospect of the 27 Pasok lawmakers withdrawing their support could deter the foreign investors helping to fuel the recovery, according to Megan Greene, chief economist at Maverick Intelligence and a columnist with Bloomberg View.

“If there were snap elections and investors were spooked by the prospect of Syriza being the negotiator for Greece, it could really hurt the Greek recovery because it’s so fragile,” she said in a telephone interview.

…

“The euro crisis seems to be over but its causes have not withered away,” former Prime Minister Costas Simitis of Pasok, the socialist party that dominated Greek politics for three decades, said in a written response to questions. “High unemployment and uncertainty fuel euro-skepticism, while member-states become increasingly reluctant to cede more power to European institutions.”

…

“Syriza wants a clean victory in order to put an end to the catastrophic path of one-sided austerity and great depression,” Dimitris Papadimoulis, a Syriza candidate said in an interview.

…

“Greece used to have a very stable political landscape,” said John Loulis, an Athens-based political analyst and communications strategist. “But the landscape has shifted dramatically. There is a big chance that we may see surprises the night of the elections.”

…

“We’re treating these elections as if they were a super opinion poll for national elections,” Lyberaki said in a May 13 telephone interview. “Reducing this to a choice between austerity and Syriza does a disservice to the guy in the street who’s in favor of Europe but has been brought to his knees by taxes.”

Except that is exactly what it is… and it seems investors are starting to comprehend that as IceCap noted last night.

The CPI headline print of 0.3% for April came just as expected, rising from 0.2% in March and the highest sequential increase since June of 2013. It was also in line with expectations. The CPI ex-food and energy rose 0.2% and up 1.8% from a year ago, both just modestly higher than expected.

Visually:

The breakdown shows why April inflation wasn’t even higher: energy service prices tumbled by -1.9% driven by a 2.6% drop in the price of electricity. On the other hand food prices refused to decline in line with what the PPI disclosed yesterday.

However, when drilling down into the food prices we find the following reveleation:

The food index rose 0.4 percent in April. The index for food at home, which rose 0.5 percent in both February and March, increased 0.4 percent in April. The index for meats, poultry, fish, and eggs rose 1.5 percent in April and has increased 3.9 percent over the last three months. The index for meats rose 2.9 percent, its largest increase since November 2003. The index for fruits and vegetables also continued to rise, increasing 0.7 percent. The dairy index also rose in April; its 0.5 percent advance was its sixth increase in a row. In contrast to these increases, the index for other food at home declined 0.2 percent, and the nonalcoholic beverages index declined for the fourth month in a row, falling 0.1 percent. The index for cereals and bakery products was unchanged in April. The food at home index has risen 1.7 percent over the past 12 months, with the index for meats, poultry, fish, and eggs up 6.4 percent over the span, the largest increase among the major grocery store food groups. The index for food away from home rose 0.3 percent in April, the third straight such increase, and has increased 2.2 percent over the last 12 months.

How about other hedonically-adjusted prices?

The index for all items less food and energy increased 0.2 percent in April, the same increase as in March. The shelter index, which rose 0.3 percent in March, increased 0.2 percent in April. The rent index increased 0.3 percent, the index for owners’ equivalent rent advanced 0.2 percent, and the index for lodging away from home rose 0.4 percent. The medical care index rose 0.3 percent in April, with the indexes for medical care services and medical care commodities both increasing 0.3 percent. The index for airline fares rose sharply in April, increasing 2.6 percent, its largest increase since November 2009. The new vehicles index increased 0.3 percent in April, and the index for used cars and trucks rose 0.5 percent. The recreation index, which declined in March, rose 0.2 percent in April. The tobacco index rose 0.1 percent, the same increase as in March. The indexes for apparel, for household furnishings and operations, and for personal care were all unchanged in April. The index for all items less food and energy has risen 1.8 percent over the last 12 months. This figure has remained in the range of 1.6 percent to 1.8 percent for 13 months in a row. The shelter index has increased 2.8 percent over the last 12 months; this figure has been trending upward. The medical care index has risen 2.4 percent over the span. The new vehicles index has risen 0.4 percent, while the index for used cars and trucks has advanced 0.2 percent.

And since US consumer disposable income is lower than most of these annual increases, it is increasingly becoming clear that aside from meat, airline travel, shelter and medical care, which are getting ever more unaffordable, US households have never been able to buy as many LCD TVs as they can now.

“Mission Accomplished”… At 297k this is the lowest initial claims print since May 2007 (beating expectations of 318k by the most in 8 months). This rebound jump lower in claims reflects on many of the most recent indicators bouncing back from weather-effects but the question is its sustainability – and extrapolatibility (which we are sure is a word being used by the sell-side strategists expecting 4% GDP growth in Q2). Total benefits dropped 9k to 2.67 million – the lowest since Dec 2007. All things considered – America is fixed… so why are bond yields collapsing and GDP so piss-poor? Just like Japanese GDP however, good news appears to be bad news as the US equity market did not flinch on this record-setting jobs print.

Turkish trade unions, who blame privatization for making mine
working conditions more dangerous, are holding a one-day strike in
the wake of the recent mine explosion
in Soma, which resulted in the deaths of 282 people.

Senate Republicans say that they will pass
immigration reform in the next two years if they manage to take
back the Senate in November.

Four crew members, including the captain, of the
South Korean ferry that sank last month have been charged with
murder. Most of the 284 people killed in the incident were school
children.

The latest exit polls from the Indian election suggest that
Hindu nationalist
Narendra Modi will be India’s next prime minister.

According to Glenn Greenwald both
Edward Norton and Jared Leto have been mentioned as actors who
may play Edward Snowden in a movie about the NSA whistle-blower.
Sony Pictures has bought the rights to Greenwald’s latest bookNo Place to Hide.

These are my last A.M. links. On Monday I am starting a new job
at the Cato Institute. So long Reasonoids, it has been a pleasure.
I will be sure to check back in from time to time to read the
comments.

After the biggest miss in over a year, Empire manufacturing rebounded phoenix-like to its biggest beat in 5 years and highest level in 4 years (at 19.0). The massive surge in the headline was matched by a huge jump in the number of employees – great news, except that the average work week was stable and proces received tumbled. What is more worrisome – and suggests this spike is entirely unsustainable is the outlook for capex and tech spending dropped, average workweek expectations shrank, and the number of employees is expected to fall.

Americans could be enjoying cultural and
commercial relations with Iranians were it not for U.S. “leaders,”
who are more aptly described as misleaders, writes Sheldon Richman.
But because of institutional, geopolitical, and economic reasons,
the neoconservatives and their allies in the government were not
about to let that happen. They thought America needed an enemy, and
Iran filled the bill. Let’s hope President Obama doesn’t let the
neocons destroy the current chance at reconciliation.

Thank god for Germany, whose Q1 GDP printed at 0.8%, above the expected 0.7%, and higher than Q4’s 0.4%, or else the Eurozone’s very disappointing Q1 GDP, which printed at 0.2% or half the expected 0.4%, could have been flat or negative.

The euro zone’s economy expanded at a weak pace last quarter despite a strong recovery in Germany, putting added pressure on the European Central Bank to enact fresh easing measures to prevent the region from sliding into a lengthy period of low inflation and economic stagnation.

Gross domestic product grew 0.2% in the euro zone during the first quarter compared with the final three months of 2013, the European Union’s statistics agency Eurostat said Thursday, well short of the 0.4% quarterly gain expected by economists.

Last quarter’s rise translates into growth of 0.8% in annualized terms, little changed from the fourth quarter. That masked a deepening divergence among the 18-member euro zone. Of the 13 euro members reporting GDP Thursday, only six expanded and some of those were small economies such as Latvia, Slovakia and Belgium.

The report “is a major disappointment, as it suggests that the euro zone is still far away from reaching the escape velocity required for a sustainable recovery,” said ING economist Peter Vanden Houte, in a research note.

Ironically, the strong GDP from Germany was explained by – what else – the weather. From Goldman:

Favourable weather at the beginning of the year is partly responsible for the strong first quarter reading. But even when taking this into account there can be little doubt that the underlying moment of the German economy is strong. GDP was up 0.8%qoq (real, calendar adjusted) after +0.4%qoq in Q4 last year, a bit higher than consensus expectations of +0.7%qoq. The statistical office will release details only later this month but said in its press release that growth was driven “exclusively” by domestic demand. Private and government consumption increased, but the main driver seemed to have been investment spending (construction as well as equipment), which increased “meaningfully”. Inventories also provided a positive growth contribution, while net trade was negative.

Well this is what happens when it is now ok for economists everywhere to be nothing more than constantly wrong weathermen.

Oddly enough favorable weather did not help France or Italy, the first of which came in at 0.0% below the 0.1% expected, and down from 0.2%, while Italy after briefly coming out of recession in Q4 with a positive print after constant negative GDP numbers, appears to be reentering recession after Q1 GDP came at -0.1%, below the 0.2% expected, and down from 0.1%.

Goldman was not happy:

Today’s data are at odds with improving business sentiment. Business sentiment has generally improved in Q1, with the composite PMI gaining almost 2pt on the quarter (51.9 in Q1 after 50 in Q4). Similarly, the Istat survey rose by 1pt in Q1. Both surveys are now around/or above their respective long-term averages and thus indicate positive growth

* Global bond rates dropped to their lowest levels of the year Wednesday, as central bankers signaled their determination to jolt the world’s largest economies out of their malaise. Investors piled into U.S., German and British government bonds, used to price everything from mortgages to car loans, driving down their yields. (http://ift.tt/1lthsoj)

* Citigroup Inc Chief Executive Michael Corbat said in a memo Wednesday that the bank had fired 11 employees in its Banamex unit in connection with the loan losses from Mexico’s Oceanografia SA de CV that the bank has blamed on fraud. (http://ift.tt/1jiroF8)

* AT&T Inc’s internal merger team is active again with talks to buy satellite-television provider DirecTV in a deal that could be valued at nearly $50 billion, people familiar with the matter said. AT&T has hired investment bank Lazard Ltd for advice on the deal, the people said. (http://ift.tt/1lthuMQ)

* French Prime Minister Manuel Valls has signed a decree giving him extended authority to block foreign takeovers of companies deemed strategic, a move that could strengthen the government’s hand in the battle for Alstom SA’s energy assets, sought by General Electric Co. (http://ift.tt/1jiroFc)

* In a significant move to streamline its process for dealing with counterfeits, Alibaba Group Holding Ltd <IPO-ALIB.N> this month began automatically removing from its biggest shopping site products that some brands have flagged as fake. (http://ift.tt/1jiroFe)

* Richard Perry’s Perry Capital increased its stake in Herbalife Ltd, the nutritional supplements maker that hedge-fund manager William Ackman of Pershing Square Capital Management has been campaigning against since December 2012. (http://ift.tt/1lthsED)

* AerCap Holdings N.V. on Wednesday established itself as the world’s second-largest jet leasing company by assets, completing its $7.6 billion purchase of the aircraft leasing unit of American International Group Inc. (http://ift.tt/1jiroFi)

FT

The British Bankers’ Association has warned that the Bank of England’s proposals to impose the world’s toughest rules for clawing back bonuses from bankers could be unenforceable in the UK and would be illegal in some countries.

Western banks are imposing tougher lending restrictions on Russian companies as sanctions against the country start to bite.

Citigroup has fired 11 staff, including four managing directors, in Mexico after a two-month internal investigation at its Mexican subsidiary, Banamex, into an alleged $400 million fraud that forced the U.S. bank to cut its 2013 earnings.

Bank of England Governor Mark Carney played down expectations of an imminent rise in interest rates even as new figures show the British economy is producing new jobs at the fastest rate on record.

GlaxoSmithKline was accused by Chinese authorities of earning billions of renminbi in “illegal revenues” through a programme of “massive and systemic bribery” as more pressure was mounted on the pharmaceuticals group following a 10-month long corruption investigation.

NYT

* Even though fast-food workers have staged several one-day strikes in the last 18 months, the protests have not swayed McDonald’s or other major restaurant chains to raise their employees’ pay. So on Thursday, the fast-food workers’ movement wants to broaden its reach as it pushes for a $15-an-hour wage that restaurant companies say is unrealistic. The movement leaders say support protests will take place in 80 cities in more than 30 countries, from Dublin to Venice to Casablanca to Seoul to Panama City. (http://ift.tt/1lthv3g)

* The New York Times dismissed Jill Abramson as executive editor on Wednesday, replacing her with Dean Baquet, the managing editor, in an abrupt change of leadership. Arthur Sulzberger, the publisher of the paper and the chairman of The New York Times Co, told a stunned newsroom that he had made the decision because of “an issue with management in the newsroom.” (http://ift.tt/1jiroFk)

* Citigroup Inc has fired 11 employees, including four high-ranking executives in Mexico, in connection with a $400 million fraud involving a large Banamex client. The bank fired many because they had not taken steps to detect the fraud or had ignored warning signs about the client. (http://ift.tt/1lthsEL)

* The ruling by Europe’s highest court that Google can be forced to remove links from certain searches will be carried out by data privacy regulators at 28 different agencies across the European Union. However, since the court gave the agencies little guidance in applying the ruling, people in different European countries could receive different treatment. (http://ift.tt/1jiroFo)

* Macy’s Inc reported a sluggish first quarter on Wednesday, dampening hopes for more positive spring spending news after an exceptionally frigid, difficult winter. It said profit rose a modest 3 percent in the quarter but that sales dropped 1.7 percent from the year before. (http://ift.tt/1lthvjL)

* The Retail Industry Leaders Association, along with several top retailers, like Gap and Walgreen, on Wednesday opened an intelligence-sharing center focused on the prevention of cybercrimes against retailers. According to the retail group, the center will allow retailers to share information about data breaches and potential threats. (http://ift.tt/1lthvjO)

* Valero Energy Partners reported a 28 percent drop in first-quarter net income on Wednesday, as a rough winter curbed demand for the petroleum products that flow through its pipelines. The San Antonio company, spun out of the Valero Energy Corp last year, reported net income of $10.5 million, or 18 cents per unit, in its first full quarter as a publicly traded company. (http://ift.tt/1lthvjQ)

Canada

THE GLOBE AND MAIL

* The Conservative government is preparing to keep Canadian warplanes on a NATO mission in Romania for another three months and possibly until late 2014. The government has declined to give Canadians a timeline for its new military commitment to NATO’s reassurance mission in Europe. (http://ift.tt/1jirr3N)

* A report by the City of Vancouver says Kinder Morgan’s Trans Mountain pipeline pitch falls short on details. Among the gaps, it says Vancouver Coastal Health cannot fully assess Kinder Morgan’s claims that there are minimal health risks because the company has not provided assessment reports. (http://ift.tt/1lthvjT)

Reports in the business section:

* Edmonton-born Greg Abel, who serves as one of Warren Buffett’s chief lieutenants, is making a big bet on the economic potential of Alberta, amid speculation that he might one day succeed the famed investor at the helm of Berkshire Hathaway Inc . (http://ift.tt/1jirr3P)

NATIONAL POST

* New Democratic Party leader Tom Mulcair is set to appear before a House of Commons committee on Thursday to answer allegations that the New Democrats misused taxpayer funds to set up partisan satellite offices in Quebec. (http://ift.tt/1lthsVj)

* Alberta Wildrose leader Danielle Smith accused Jim Prentice on Wednesday of trying to eliminate her party as a threat before he even enters the race to become premier. Smith says a member of Prentice’s inner circle has approached someone on her team pitching a merger if Prentice wins the Progressive Conservative leadership contest. (http://ift.tt/1jirr3T)

FINANCIAL POST

* Sears Canada’s demise seems inevitable after news emerged that its biggest shareholder may pull its stake out of the ailing department store chain. But with no single retailer seen as an obvious suitor to acquire the entire operation, it is likely that Sears Canada will continue to operate, even if Sears Holdings Corp sells its 51 percent ownership in the business. (http://ift.tt/1lthvjV)

* Builders of Toronto condominiums get as little respect these days as the embattled mayor, according to one of the city’s largest high-rise developers. Toronto, whose mayor entered a rehabilitation center after admitting smoking crack cocaine, is in the midst of a building boom. (http://ift.tt/1lthvAd)

China

SHANGHAI SECURITIES NEWS

– The Shanghai Stock Exchange will conduct test trading on Saturday for stock options linked to individual shares, sources told the paper. Test trading is the last step before the official roll-out of such products, the sources said.

– Several provinces and cities are making plans to implement “One Road, One Strip”, a long-term economic and political strategy that aims to promote economic ties and regional integration between countries along the traditional Silk Road, sources familiar with matter said.

CHINA SECURITIES JOURNAL

– The State Council, China’s cabinet, said the government would implement a range of policies to support “production-oriented” service industries, including research and development, industrial design, commercial services, sales and marketing, and after-sales service.

21ST CENTURY BUSINESS HERALD

– China Reinsurance Group Corp has started preparing for its initial public offering (IPO) and is expected to list as early as next year, multiple sources told the paper. Given the current long waiting list for IPOs in the mainland stock market, the company may consider listing in Hong Kong, another person close to the matter said.

CHINA DAILY

– Beijing will impose a new levy on the discharge of certain organic compounds, aiming to increase environmental awareness in the city’s industrial enterprises, municipal officials said. The money collected from the levy will be used to improve the city’s air quality, they added.

PEOPLE’S DAILY

– Members of the Communist Party should insist on their political beliefs and have the courage to criticize wrong thoughts, the paper which acts as the party’s mouthpiece said in an editorial.

Britain

The Telegraph

BANK OF ENGLAND IN NO RUSH TO RAISE INTEREST RATES

Interest rates will remain on hold this year, the Bank of England has signalled, but households must be prepared for a gradual increase in borrowing costs amid a backdrop of “robust” growth and rapidly falling unemployment. (http://ift.tt/1lthtbG)

PFIZER RESEARCH BOSS CALLS ON TOP UK SCIENTISTS TO SUPPORT ASTRA DEAL

Pfizer’s top scientist Mikael Dolsten on Wednesday embarked on a whistlestop tour of Britain’s leading scientific figures to garner support for an AstraZeneca deal. (http://ift.tt/1lthvAh)

The Guardian

UK UNEMPLOYMENT AT FIVE-YEAR LOW AMID JOBS BOOM

Britain’s jobs boom accelerated in the first three months of the year as unemployment reached a five-year low, fuelled by a surge in self-employed workers. (http://ift.tt/1jiroVQ)

ASTRAZENECA ADMITS A HIGHER BID FROM PFIZER COULD SUCCEED

AstraZeneca boss Pascal Soriot has undermined the drug maker’s campaign to stay independent, by admitting that an increased takeover bid from U.S. rival Pfizer could outweigh concerns over the needs of cancer patients. (http://ift.tt/1lthtbM)

The Times

ANGRY SHAREHOLDERS SPRING NEW REVOLT ON EXECUTIVE PAY

Two of Britain’s best known companies, bus, coach and train operator National Express and broadcaster ITV PLC , were hit by substantial shareholder revolts over executive pay. (http://ift.tt/1jiroVS)

COMPASS SERVES UP ANOTHER 1 BLN POUND TO ITS HUNGRY INVESTORS

Compass Group Plc, the world’s biggest contract catering company, is to hand back 1 billion pound to shareholders in a special dividend payout. (http://ift.tt/1lthts6)

The Independent

GLAXOSMITHKLINE’S FORMER CHINA CHIEF MARK REILLY CHARGED WITH BRIBERY

Chinese police have charged the British former head of GlaxoSmithKline with bribery and fraud in connection with a long-standing scheme to boost drug sales in China. (http://ift.tt/1jiroVU)

PATISSERIE VALERIE LOW PRICED FLOAT SPARKS LISTING FEARS

Patisserie Valerie <IPO-PATV.L> listed at the bottom of its price range – although shares then rose nearly 9 percent- prompting fears that investor enthusiasm for new listings is wearing off. (http://ift.tt/1lthtsa)

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled today include:Empire State manufacturing survey for May at 8:30–consensus 5.0Consumer Price Index for April at 8:30–consensus up 0.3% for the monthJobless claims for week of May 10 at 8:30–consensus 317KIndustrial production for April at 9:15–consensus up 0.4% for the monthPhiladelphia Fed survey for May at 10:00–consensus 14.3

ANALYST RESEARCH

Upgrades

Acxiom (ACXM) upgraded to Market Perform from Underperform at BMO CapitalEarthLink (ELNK) upgraded to Outperform from Perform at OppenheimerHeartland Payment (HPY) upgraded to Outperform from Neutral at RW BairdKinder Morgan (KMI) upgraded to Conviction Buy from Buy at GoldmanL-3 Communications (LLL) upgraded to Buy from Neutral at BofA/MerrillMiller Energy (MILL) assumed with a Buy from Hold at Brean CapitalNimble Storage (NMBL) upgraded to Buy from Neutral at GoldmanParkway Properties (PKY) upgraded to Buy from Hold at StifelPernix Therapeutics (PTX) upgraded to Strong Buy from Buy at NeedhamRange Resources (RRC) upgraded to Conviction Buy from Neutral at GoldmanSteel Dynamics (STLD) upgraded to Outperform from Market Perform at CowenTandem Diabetes (TNDM) upgraded to Buy from Hold at Deutsche Bank (pre-open)Twitter (TWTR) upgraded to Neutral from Underweight at Atlantic EquitiesZimmer (ZMH) upgraded to Buy from Neutral at SunTrust

Downgrades

American Capital Mortgage (MTGE) downgraded to Market Perform at JMP SecuritiesAnglo American (AAUKY) downgraded to Neutral from Outperform at Credit SuisseBE Aerospace (BEAV) downgraded to Neutral from Buy at UBSBristol-Myers (BMY) downgraded to Market Perform from Outperform at BMO CapitalColumbia Property (CXP) downgraded to Equal Weight from Overweight at Morgan StanleyHuntington Ingalls (HII) downgraded to Neutral from Buy at BofA/MerrillITC Holdings (ITC) downgraded to Neutral from Overweight at JPMorganLATAM Airlines (LFL) downgraded to Market Perform from Outperform at Raymond JamesPhotoMedex (PHMD) downgraded to Hold from Buy at AscendiantSouthwestern Energy (SWN) downgraded to Neutral from Conviction Buy at GoldmanUrban Outfitters (URBN) downgraded to Market Perform from Outperform at FBR CapitalVOXX International (VOXX) downgraded to Neutral from Buy at B. RileyVodafone (VOD) downgraded to Neutral from Buy at Goldman

Initiations

ACADIA (ACAD) initiated with an Overweight at JPMorganCherokee (CHKE) initiated with a Buy at B. RileyMagellan Petroleum (MPET) initiated with a Buy at B. RileyRackspace (RAX) assumed with an Overweight at JPMorgan

In yet another quarter confirming that Walmart is merely a company that can beat analyst expectations when it cashes Uncle Sam’s welfare checks and foodstamps, when the impact of Obamacare is ignored, and when the second it snows all bets are off, WalMart reported Q1 EPS of $1.10, below the $1.15 expected, even if the company was able to explicitly quantify what the impact of snow in the winter was: “Severe weather in the U.S. businesses negatively impacted EPS by approximately $0.03.” Apparently the weather’s impact on the top line was over $1 billion because revenues came in at $114.96 billion, below the $116.3 billion expected.

In fact the weather in the quarter ended April 30 (when as far as we can recall there was only snow in February because retail sales in March soared on the snow thawing) was so bad, the company dedicated an entire section to it:

“Walmart’s first quarter net sales increased 0.8 percent over last year. Like other retailers in the United States, the unseasonably cold and disruptive weather negatively impacted U.S. sales and drove operating expenses higher than expected,” said Doug McMillon, Wal-Mart Stores, Inc. president and chief executive officer.

Comp stores of -0.2% missing expectations of 0.0% were also due to, you guessed it, ther weather:

“Our comp of negative 8 basis points for the period was in line with our relatively flat guidance,” said Bill Simon, Walmart U.S. president and CEO. “A number of severe winter storms negatively impacted us during the quarter. A solid start to spring and a strong Easter drove positive comps in the back half of the quarter.

And then there were taxes:

Additionally, the company’s effective tax rate for the quarter was higher than anticipated. The company still expects the full-year tax rate to range between 32 and 34 percent.

How long until WMT buys a Dutch company and reincorporates there to save on taxes?

Ok fine, weather (and taxes) were to blame for everything in the past. So what about the future? Well, WMT forecast a Q2 EPS range of $1.15-$1.25, below the $1.29 consensus, for the following reasons:

“We expect second quarter fiscal year 2015 diluted earnings per share from continuing operations to be between $1.15 and $1.25. This compares to $1.24 last year,” said Charles Holley, executive vice president and chief financial officer. “Our guidance assumes incremental investments in e-commerce, headwinds from higher health care costs in the U.S. and increased investments in Sam’s Club membership programs. We continue to expect our full-year effective tax rate to range between 32 and 34 percent. We expect our effective tax rate to be at the high end of this guidance for the second quarter.”

So to summarize: weather, Obamacare and taxes. And of course, we expect that the lack of foodstamps will also be discussed on the earnings call.

Of course, the only reason why the company’s EPS disappointed is that while WMT CapEx tumbled from $3.0 billion a year ago to just $2.2 billion this quarter, so did buybacks, as the company repurchased a measly $626 million of stock down from $2.2 billion a year ago. Judging by the stock reaction in the premarket, shareholders are anything but happy with this outcome.